ADVERTISEMENT

Ashok Leyland To Retrofit Older Engines To Make Them BS-IV Compliant

Ashok Leyland plans to sell the older engines in the spare parts market. 

A Bharat Stage-IV vehicle. (Source: BloombergQuint)
A Bharat Stage-IV vehicle. (Source: BloombergQuint)

Ashok Leyland Ltd. will retrofit its older Bharat Stage-III (BS-III) vehicles to make them compliant with the new emission norms, its Managing Director and Chief Executive Officer Vinod Dasari told BloombergQuint.

The commercial vehicle manufacturer is sitting on an inventory of older vehicles which can’t be sold right now, after the BS-IV emission norms came into effect from April 1. Dasari said 95 percent of its old stock of just over 10,000 vehicles has not left the factory, which makes it easy to retrofit the engines.

The Chennai-based company which unveiled its new range of BS-IV vehicles on Friday, plans to sell the older engines and spare parts in the after-sales market, to reduce the financial loss that it has incurred. “The cost of the engine is around Rs 1.50 lakh and we will sell it for Rs 2 lakh. So we will actually end up making a profit through the sale,” said Dasari. The whole exercise, including retrofitting the older BS-III compliant vehicles with BS-IV engines, would result in “limited losses”, he added.

India plans to move to BS-VI from April 1, 2020, leapfrogging over BS-V, which gives the new BS-IV technology only three years in the market. Although most manufacturers had developed engines compliant with BS-IV emission norms before 2017, sales of diesel-powered units, in particular, was hampered by the limited supply of compliant fuel across smaller towns and villages.

Ashok Leyland has integrated a variation of the older 'Exhaust Gas Restoration' (ERS) technology in its BS-IV compliant vehicles, which the company says increases fuel economy of the vehicles by 10 percent over the outgoing models.

Overseas Expansion

Ashok Leyland which already has a facility in Ras Al Khaimah in the United Arab Emirates, plans to set up manufacturing units in the Ivory Coast and in Kenya, Dasari said.

The company is currently in the process of signing a memorandum of understanding with a new partner in Russia to set up operations there, he added.

The Chennai-based manufacturer targets selling one vehicle overseas for every two sold in India by 2020.

Ashok Leyland plans to unveil one vehicle per quarter going ahead, and is looking to quadruple its sales of light commercial vehicles by 2020 from a little over 30,000 units in the last financial year.

(Disclaimer: The correspondent's trip to Chennai was organised by Ashok Leyland)